Trade Liberalization, Competition and the WTO

Trade Liberalization, Competition and the WTO

Edited by Chris Milner and Robert Read

The prospective WTO Millennium Round of negotiations will highlight critical economic issues regarding the application and implementation of the WTO rules to international trade in goods and services. In this book, a distinguished group of academic experts considers the agenda and areas of interest for the next Round in light of Seattle, the functions of the WTO and competition policy issues arising from trade liberalization.

Chapter 6: Trade and Competition in the New WTO Round

Peter Holmes

Subjects: economics and finance, international economics


Peter Holmes This chapter is concerned with the origins of the ‘trade and competition’ debate. This is not, in fact, a ‘new’ issue for the world trading system but one which, for reasons explained below, has been a preoccupation for more than 50 years. Studies and policy experience show that there are important crossborder issues in practice. It is argued, however, that while the case for some form of multilateral rules in principle is clear, it is not at all evident what this should be in detail. Positions differ, with the EU seeking a clear WTO involvement and the USA less keen, and with divisions among developing countries. One of the strongest arguments is that WTO rules already do cover some aspects of competition policy and there is a multiplicity of bilateral systems; there is, however, a need to clarify this aspect of trade law. Examination of the EU’s recent proposals shows that it has responded significantly to the criticism that it was only interested in forcing other countries to use EU-type rules to ensure market access for its firms. There still remains, however, reluctance on the part of many WTO members to initiate actual negotiations with a commitment to produce an agreement. 1. THE BACKGROUND TO THE TRADE AND COMPETITION DEBATE1 The topic of ‘trade and competition policy’ was put on the WTO agenda by the Singapore Ministerial Meeting in 1996 and a decision was taken to set up a working group to consider this interface. The...

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